Income Taxes and the Military

State and federal income tax laws contain special provisions for members of the military and their families. Details on some of the major issues facing military families during income tax filing season can be found below.

Key issues

Ohio Veterans Bonus — The state is awarding a bonus to veterans who served during the time of the first Persian Gulf War or during the conflicts in Afghanistan and Iraq. This bonus is not subject to either federal or state income tax. The details are on this page.

Nonresident military service members and spouses — A November 2009 federal law exempts military spouses who are not residents of a state where they are living with their spouse from the income taxes of the state, provided they are a resident of the same state as their spouse. However, nonresident military and nonresident spouses serving in Ohio are strongly encouraged to file an IT 10 form each year to avoid a billing notice from the state. More information, and what to do if you receive a billing notice, may be found here.

Deduction for military stationed outside Ohio — Military pay earned while on active duty and stationed outside of Ohio is exempt from the Ohio income tax and may be deducted to the extent it is included in federal adjusted gross income. Details on how to take this deduction are found here.

Military retirement pay — Retirement pay received for service on military active duty or the National Guard or Reserves, as well as pay received by a surviving spouse through the Survivor Benefit plan, has been exempt from the Ohio income tax since 2008. Beginning in taxable year 2013, taxpayers who receive retirement income related to uniformed services in the Commissioned Corps of the National Oceanic and Atmospheric Administration (NOAA) and the Commissioned Corps of the Public Health Service (PHS) are allowed a deduction for the entire amount of such pay to the extent it is included in federal adjusted gross income.

Need more help? — You can reach us by e-mail at Military-Info@tax.state.oh.us. Our toll-free number for individual taxpayer inquiries is (800) 282-1780, and the toll-free number for forms is (800) 282-1782.